U.S. Networks Stocks Rise with Access to $6.8 Trillion Chinese Market (April 23, 2015)
Stocks for all four major U.S.-based payments networks were up yesterday, following news that they’re finally gaining full access to one of the largest payments economies in the world. China announced it will open its domestic bankcard transaction system to foreign firms. Set to go into effect June 1, the declaration will enable outside payments networks to operate in China without co-branding. Previously, the networks were allowed to operate in the country, but were required to pay a fee to China’s UnionPay network to process transactions and cards had to be co-branded with UnionPay.
In an online announcement, the People’s Bank of China said opening up the Chinese market for bankcard clearing will help improve the country’s card-clearing services through market competition. The bank indicated last October that it would begin loosening restrictions on foreign providers operating in its payment card system.
The declaration gives foreign payments networks unfettered access to the world’s second-largest economy, where consumers spent $6.8 trillion on UnionPay’s network in 2014, according to the Chinese central bank—up 33 percent from 2014. China gradually has been expanding access to its massive payments market for outside firms over the past few years. In late 2012, Discover and UnionPay signed a deal to enable Chinese consumers to shop online through Discover’s e-merchant network. The following year, the Chinese central bank granted its first-ever third-party payment licenses to foreign-based providers.
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